This invention relates in general to label dispensing and applying machines and more particularly to a machine for removing pressure sensitive type labels from a backing sheet and the application of those labels to parcels such as mail or packages. Various automatic label dispensing machines are available for removing pressure sensitive labels from a backing strip, however, these machines, for the most part, merely strip the label from the backing strip so that the label is disposed in a position for manual application to a parcel. There are also machines available for automatically removing one label at a time from a backing strip such as disclosed in U.S. patent Ser. No. 3,983,603 issued Oct. 12, 1976 to George A. Berner and entitled "Method and Apparatus for Transportation of a Label". In this type of a machine, a single label is removed from the backing sheet and transported to a chute where the label is picked up by pressing a package against the pressure sensitive side of the label.